Which of the following requirements are among the three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax?
A) The exempt organization conducts a trade or business.
B) The trade or business is not substantially related to the exempt purpose of the organization.
C) The trade or business normally generates an annual profit of not greater than $25,000.
D) Only a. and b.
E) a., b., and c.

Question

Quizplus · Accepted Answer

The three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax are (a) the exempt organization conducts a trade or business, (b) the trade or business is not substantially related to the exempt purpose of the organization, and (c) the trade or business generates income. The amount of income is not a consideration in determining whether an organization is subject to the tax, therefore option c is incorrect. Options a and b are correct, while option c is incorrect. Therefore, the correct answer is D, only a. and b.

Which of the Following Requirements Are Among the Three Requirements